Foleys Plead Guilty In Campaign Scheme Linked To Rowland

HARTFORD — Businessman Brian Foley and his wife, former congressional candidate Lisa Wilson-Foley, admitted in court Monday that they used a sham consulting contract with former Gov. John G. Rowland to pay him for secret political assistance to Wilson-Foley's 2012 campaign.

Both Foleys pleaded guilty Monday in U.S. District Court to conspiring with Rowland and others to violate campaign finance law by concealing $35,000 Brian Foley paid the ex-governor in 2011 and 2012 through a business and law office associated with his nursing home chain, Apple Rehab.

Brian Foley has been cooperating with federal authorities, who people familiar with the matter said are building a case to indict Rowland. In connection with the cooperation, Foley and his wife negotiated plea agreements in which they both admitted guilt to misdemeanor charges with maximum penalties of a year in prison.

The couple pleaded guilty in successive hearings in federal court in Hartford before U.S. Magistrate Judge Donna F. Martinez.

"I did not report money that my husband paid to John Rowland while he was working on my campaign," Lisa Wilson-Foley, 54, said during her hearing.

Brian Foley, 62, told the court: "I knowingly and intentionally conspired with co-conspirator one, who was John Rowland."

Rowland is not identified by name in prosecution documents filed in court Monday. But in remarks to the court, both of the Foleys and Assistant U.S. Attorney Liam Brennan said Rowland is "co-conspirator 1" described in the documents as concealing his role as a paid consultant to the Wilson-Foley campaign.

Three other people are identified in prosecution documents as unindicted co-conspirators. One was a senior Wilson-Foley political adviser, one is a senior officer of Foley's nursing home chain and Foley identified the other in court as his business lawyer. They have not been identified by name.

People familiar with the case said Rowland, who recently retained a Washington, D.C., law firm, has had unsuccessful talks with prosecutors about a possible plea agreement. Rowland is employed as a talk show host for radio station WTIC-AM. Rowland's show was preempted by a baseball game Monday. The station did not respond to Courant messages seeking comment as to whether his status as on-air host might be affected.

Rowland resigned during his third term in mid-2004 after he and senior members of his administration were identified as targets of a far-reaching federal corruption investigation. He later pleaded guilty to corruption-related charges and spent 10 months in prison.

As a practical matter, the conviction made Rowland unemployable as a political consultant. A prosecution document asserts that the couple expected to be battered by critical press coverage if the consulting relationship became public. Even Rowland warned of negative consequences, according to an email cited in the document.

Bad Press

"I want to stay under the radar as much as possible and get the job done …want to avoid a bad article… ," Rowland wrote to Wilson-Foley in an email, according to the prosecution document. "I am just a volunteer helping you and 'many other Republican candidates' in case anyone asks."

It was Rowland who approached the Foleys in early September 2011 about joining the campaign as a secret consultant, according to the prosecution document. At the time, Wilson-Foley was one of several Republicans competing for the party's 2012 nomination to run for Congress in the 5th District.

"I have an idea to run by you, what days are good?" Rowland wrote in an email cited by the prosecution document.

Rowland met with both Foleys a week later and suggested that he be paid to replace a Washington-based consultant hired by the Wilson-Foley campaign.

Rowland had previously offered his services to Mark Greenberg, a competing Republican candidate, Greenberg has told federal investigators. The prosecution document said that Rowland claimed to have turned down an offer to work for Greenberg, but that Greenberg never offered Rowland a job.

Brian Foley admitted Monday that he helped draft a consulting contract that made it appear that Rowland was being paid $5,000 a month for providing business advice to Apple Rehab. Foley said the monthly checks to Rowland were drawn on a real estate company Foley owns and passed through the office of his business lawyer.

The prosecution document said the lawyer – referred to as "Attorney 1" – recommended that "due to … [Rowland's] background" and other issues "that the contract be between my Law Office and [Rowland] — that way there is no connections."

The document did not identify the lawyer, nor was the lawyer identified during Monday's proceedings.

In April 2012, when Wilson-Foley released the contract in response to controversy over Rowland's role in her campaign; the contract, running from October 2011 through March 2012, was between Rowland and the "Law Offices of Christian B. Shelton, LLC."

Shelton, of Branford, could not be reached for comment Monday.

Prosecutors said Monday that during the contract period, in an attempt to hide Rowland's paid role with the campaign, Rowland had "provided nominal services to the nursing home company in order to create a 'cover' or pretext" that he was being paid for business advice "when in fact he was being paid for his work on behalf of Wilson-Foley's campaign."

By October 2011, the prosecutors said, Rowland was working for the campaign on a regular basis. Among other things, he advised Wilson-Foley against running television ads associating herself with her husband's chain of 26 nursing homes. Such ads, prosecutors said Rowland emailed to Wilson-Foley, could provoke complaints to the Federal Election Commission.

"So, now, instead of talking about what we want to talk about we are in a story that has words like 'illegal' 'skirting' 'violation' and 'wealthy.' … While some people will see the ad, notice you and make the connection, most people won't," prosecutors said Rowland wrote.

Wants Bonus

In March 2012, prosecutors said Rowland "had a conversation with Brian Foley in which he asked for a bonus if Wilson-Foley won the nomination."

Within a month, however, Wilson-Foley's campaign was defending itself from political speculation that Rowland was part of the team. Prosecutors said that in April an unindicted co-conspirator referred to as "Political Advisor 1" drafted talking points "designed to mislead the public concerning the true purpose of the payments to" Rowland.

Former Republican state chairman Chris Healy was the Wilson-Foley campaign's paid senior adviser at the time. He said Monday night that he didn't know if he was "Political Advisor 1," but he did draft a public statement in 2012 denying Rowland was being paid by the Wilson-Foley campaign and saying Rowland had a paid business relationship with Foley's nursing home chain.

Healy said that his statement only repeated what the Foleys and Rowland told him, and that he didn't know it was false. In light of Monday's guilty pleas, he said, the Foleys "did not tell me the truth, obviously," and "I guess" Rowland didn't either.

Greenberg has said publicly that Rowland offered him a similar consulting arrangement before the 2010 election – under which Rowland would help his ultimately unsuccessful campaign but be paid as a consultant to Greenberg's nonprofit animal-rescue organization, The Simon Foundation.

The prosecution document said that "Political Advisor 1" wrote an electronic message to Rowland saying about Greenberg, who was referred to as "Candidate 2": "If you have anything to refute [Greenberg] I need it to [expletive] this smuck [sic]."

Asked if he wrote that, Healy said, "Well, maybe," then paused and said, "probably… It was in the heat of battle." Asked if federal investigators had contacted him, Healy said, "I'm not allowed to say, one way or the other."

The prosecutors said Rowland was paid $15,000 for campaign advice in 2011 and $20,000 in 2012.

Two years ago, federal investigators began questioning dozens of witnesses to determine whether the $35,000 in consulting fees that Foley's company paid Rowland from October 2011 to March 2012 was instead unreported compensation from his wife. Lisa Wilson-Foley was campaigning at the time – unsuccessfully, it turned out — for the Republican nomination in the 5th District.

Failure to report campaign expenditures in federal elections is a violation of campaign law. The Foleys are scheduled to be sentenced by Senior U.S. District Judge Warren W. Eginton in Bridgeport on June 23 and face a maximum prison term of one year and a fine of up to $100,000.

Brian Foley's principal lawyer, Hubert J. Santos of Hartford, was not in court Monday and could not be reached. A lawyer from Rowland's Washington, D.C., law firm, William Drake, said he had no comment. A message seeking comment was left with Rowland.

During most of the investigation, which grew out of the bruising 5th District primary campaign in 2012, Foley tried to convince federal prosecutors that he paid Rowland for business advice, people familiar with the investigation said.

The six-month consulting contract was between Rowland and a Foley lawyer, but Foley said in 2012 that the consulting was for Apple Rehab. The Wilson-Foley campaign said in 2012 that Rowland was assisting her campaign as a volunteer.

Late last year, Foley decided to cooperate. One of the factors contributing to the decision, according to multiple sources, was an assertion by federal authorities that they could prosecute his wife otherwise.

Questions about the propriety of Rowland's consulting arrangement with Foley were first raised in news reports and by Michael Clark, a candidate competing with Wilson-Foley and others for the 5th District Republican nomination. Clark is a retired FBI agent who supervised the investigation that resulted in Rowland's conviction and imprisonment in 2004.

The prosecution document filed in court Monday cites an email from Rowland to Wilson-Foley in which the ex-governor suggests they might be able to make his consulting arrangement with the campaign public if Clark, whose name he misspells, is knocked out of the race.

"…[A]fter Clarke gets out of the race it can be different," Rowland wrote.